Today we started the day by meeting with the marketing head of a shoe making company called Valasca. This woman gave us a quick breakdown of the history of Valasca, starting out with two guys who wanted to create an online luxury shoe company while keeping the price at an affordable point. They were both working in the business sector and decided to create their own company with the help of a few angel investors. Much of the actual creation of the product isn’t them. They outsource the creation of the leather shoes to various Italian artisans that they hire based on demand. We didn’t visit them because it would have been a 6 hour drive and they work in small apartments in central Italy. They also outsource their logistics and warehousing to a company that we visited today called Fiege. It’s a massive warehouse where they check the products to make sure that there’s no defects and they store it until it’s sent out to the customers. With much of the business actually done outside of the company itself, one might wonder, what does Valasca actually do? Valasca creates the designs for the shoes that they want to produce. They also work extremely hard on marketing and establishing a brand so that their customers have something concrete to hold on to. They try to make sure that on every front, Valseca has a cohesive image and marketing. They want to target their demographic of men from ages 25-55 by having all things that would specifically appeal to them so that they’re drawn in to check out the shoes. The actual production of the shoes and distribution isn’t done by them, but they choose who does it. This may seem rather odd at first, but this allows them to make it so that the consumer has to pay less for the shoes because the company doesn’t have to pay as many people throughout the process. This is how they’re able to achieve their goal of selling the high quality shoes at relatively low prices compared to their competition.
The business model that they’re following is a direct to customer model. This means that they are cutting out the middleman and making it so that they sell the product that they design directly to the consumer on the internet. This model is very popular in America with many of the start up companies. They don’t have the funds to be able to just open a store and blindly hope that it will work out, so they create a website and start trying to advertise their brand. They may remain online entirely or they could take the route of Valasca and start opening a few botegas in order to sell more. They said that within a year they were able to make more than 30% of their profits from just opening one storefront. In the future they plan to expand by opening more storefronts throughout Italy as well as expanding to Europe and the United States. They also said that in order to expand the company they believe that they need to get some more angel investors to help them really jump to the next level as a company. This makes sense because if they want to be able to open stores in New York City or other important places throughout the world it would be very difficult if they don’t have the necessary funds to be able to support that. Luckily since they have many of their sales done online, they can determine where it would be good to open a store based on data collected about where the people buying their shoes are from. If the shoes are selling really well in the New York area, then opening a store there should be able to make a lot of money for the company. If Valasca continues their current model, they should be able to achieve the goals that they’re setting themselves. It took quite a lot of courage for them to take the initial plunge into starting this business, but now the success seems to be coming their way. They are growing at an incredible rate and should be able to do whatever they want to in the future.